Answers
WACC = WEIGHTED AVERAGE COST OF CAPITAL.
It's the overall cost of raising funds for the firm.
Weighted average cost of capital= (weight of equity x cost of equity)+(weight of debt x cost of debt).
Weighted average cost of capital= (0.48 x 12.24%)+(0.52 x 6.5%).
= 9.25%
formula! P- Doli+g) ke-i Pa price of share Do- last year dividend. go growth sate.
.
Ke = cost of equity. 23.42 = 2.10 (1-03) Ke-0.03 ke - (2.24% ka= I (1-2) + ( RU-NP) I coupores to tax rate RU= par value NP- auvent value. no no. of periode 2 • 30 (1-0-35) + (1000-694-15 L 38 1000 +694-45 2 x kd= 6.54. (cost of debt) we = weight of 470,000 x 23-42 equity 000 x 23.42 + 17,000 x 694-95) = 0.48 = 17,000 x 694-75 wd = weight of dest (470,000 23.42 + 17, ovo X694.75 ) 0.52
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